US Business Owners Positive on National, Local Economy — Evening Brief – 03.04.25
Business owners are riding a wave of positivity about the road ahead, according to PNC’s latest semi-annual survey of 500 small and mid-sized firms. The data shows a sturdy optimism not just for their own businesses but spilling over to the national and local economies too.
Nearly eight out of 10 (78%) are feeling good about their own business prospects—close to last fall’s 76% and just shy of the survey’s all-time high of 79% from spring 2024. Now in its 23rd year, the survey pegs national economy optimism at 50%, a bit off the peak of 56% from last fall and 55% from spring, while 56% are upbeat about their local economy—down from a year-ago high of 63%.
PNC’s chief economist Gus Faucher sums it up: The U.S. economy is in decent shape heading into spring 2025—strong demand and a solid labor market are keeping things humming. Higher-revenue businesses—those pulling over $5 million—lead the pack, with 62% optimistic locally and 84% bullish on their own futures. They’re also the most likely to bet on sales and profit bumps over the next six months—73% and 52%, respectively.
“Demand from both consumers and businesses is increasing, driving solid gains in revenue and profit across industries. The U.S. economy should continue to expand through the rest of this year and into 2026, supporting small and mid-sized businesses,” Faucher said.
Overall, 65% expect sales to climb in the next six months—steady from fall and up from 55% last spring—while 57% see profits rising, matching last fall and nearing spring 2024’s 52%. Sector-wise, manufacturing and construction are the sales optimists—70% and 68% expecting gains—while services lag at 58%
Other findings in the survey include inflation concerns with 43% “extremely concerned” about it, flat from fall but double spring 2024’s 20%. Additionally, price hikes are expected to cool, with 53% planning to nudge prices up in six months, down from 61% last fall and closer to 47% a year ago. Only 20% of those hiking aim for 5% or more—half of fall’s 38%.
Business owners expect to hit the pause button on hiring, with just 15% planning to add full-time staff, down from 18% last fall and 21% a year ago. Owners also expect to pile up inventory as 42% of them predict bigger stockpiles, a survey high, up from 34% last spring—maybe prepping for tariff hits. They also anticipate cash reserves to dip, with 26% seeing lower cash next year, up from 17% last fall and 7% a year ago.
While the PNC survey is encouraging, not everyone is optimistic. Small business sentiment is still jittery when observing various indexes with tariff talks and inflation lingering. The most recent NFIB Small Business Optimism Index for January revealed optimism slipped to 102.8 from December’s 105.1 post-Trump win, but it’s still above the 98 average.
Plans to hire held at 22%, and 47% expect better economic conditions—solid, though the Uncertainty index spiked to 100, its third highest ever, hinting at nerves beneath the surface. Combine this with the Atlanta Fed’s GDPNow model crashing to -2.825% amid a trade deficit blowout and soft PMI data warrant caution.